Understand Your Loan Agreement, Ask Your Business Lenders These Questions
By Space Coast Daily // October 1, 2017
difficult to start a business on your own
It is difficult to start a business on your own and you will need all the help you can get. Most of the times, this means that you will need to find various lenders in order to finance your business. Whether we are talking about a bank, or sba loans, you must understand your loan agreement perfectly.
Therefore, we have decided to help you and we have come up with these questions that make your financial agreements more clear. You should ask your lenders these questions, and do not be afraid to add some of your own if you are not sure about something.
Are you working with other business owners in my industry?
Business owners should know how to choose the best lenders. If you have more than one option, a good way to choose a lender is by asking about his experience in your industry. You want to get a loan from someone who understands your business, and there are many lenders that work only with specific companies.
Finding a lender that works with other business owners in your industry can be exactly what you need since there is a chance that you will receive an offer that is suited to your business.
Do you have any testimonials?
Transparency is key when borrowing a loan. That is why you should ask your lender if there are any testimonials. This way you can discover additional information about their services and how pleased are their customers. You can also ask them if they would be ok with you getting in touch with their business clients in order to learn more about their treatment.
While it may seem like you are suspicious, you should remember that this is the best way to keep your business safe. You don’t want to deal with a lender that is not serious since this can harm your business.
What is the total cost of my loan?
You probably think that this is the first thing they tell you about, but sometimes there are some hidden costs that can make your interest rate bigger than you think it is. Therefore, you should discover what is the total liability of the loan, including all the charges and fees. You can ask your lender to break down everything for you.
When can I access the funds?
A simple question, but sometimes you might have to ask it. It can be especially useful when you try to discover the lender that will offer you funds quickly. If you do not have time to waste, you might not want to deal with a process that takes weeks.
When do I have to make the first payment?
Ask this question to be completely sure. It is crucial to make all your payments, and you wouldn’t want to lose the first one since it can damage your credit score. Make sure you know when you have to pay so that you have some money set aside.
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